Question:
We have been alerted to the potential requirement to register for the Beneficial Ownership Information as part of the Treasury’s Crimes Enforcement Network (FinCEN) which is related to the Corporate Transparency Act. see https://www.fincen.gov/boi .
There is an exclusion for not-for-profit HOAs, but I see none for the rest of us. The President, VP and Treasurer meet the requirements as a “beneficial owner” of any organization, but registration requires the birthday as well as a copy of the driver’s license or passport which is intrusive. We are a small (51 lot) community….. Are you aware of the necessity to register under this law/regulation or any exemption? Seems a bit ridiculous. Thank you for any information or help.
– Stephen
Answer:
Hi Stephen,
Most HOAs are considered reporting companies under FinCEN and, thus, must file Beneficial Ownership Information. If the HOA is considered a tax-exempt organization under the IRS. Additionally, according to the FAQs posted on FinCEN’s website, “As with any entity, if an HOA was not created by the filing of a document with a secretary of state or similar office, then it is not a domestic reporting company.”
If you are concerned about security, FinCEN ensures that it uses a secure filing system. Additionally, in its FAQs, FinCEN address who has access to the information, stating the following:
“FinCEN will permit Federal, State, local, and Tribal officials, as well as certain foreign officials who submit a request through a U.S. Federal government agency, to obtain beneficial ownership information for authorized activities related to national security, intelligence, and law enforcement. Financial institutions will have access to beneficial ownership information in certain circumstances, with the consent of the reporting company. Those financial institutions’ regulators will also have access to beneficial ownership information when they supervise the financial institutions.
FinCEN published the rule that will govern access to and protection of beneficial ownership information on December 22, 2023. Beneficial ownership information reported to FinCEN will be stored in a secure, non-public database using rigorous information security methods and controls typically used in the Federal government to protect non-classified yet sensitive information systems at the highest security level. FinCEN will work closely with those authorized to access beneficial ownership information to ensure that they understand their roles and responsibilities in using the reported information only for authorized purposes and handling in a way that protects its security and confidentiality.”
Disclaimer: We are not lawyers. The information provided on this website does not constitute legal advice.
